The Hong Kong Fiasco

Hong Kong is a truly global city – sometimes, I tend to think that it is even more global and open than Singapore. There is no other city in the world which comes close to Hong Kong if you factor in all key parameters which define a global city, except for one very major thing: cost of living. I will not agree that Singapore is the most expensive city in all of Asia Pacific – it is Hong Kong, very closely followed by Tokyo, then comes Singapore.

In economic dynamism, the resolute hard working attitude of its people, financial strengths of its banking institutions, and several other key parameters, Hong Kong has remained No. 1 in Asia Pacific, though Singapore has tried and succeeded in dislodging it from the coveted perch more often than not. Singapore studied Hong Kong for a long time before adopting some of its success formulas, so it is not surprising that both cities appear to be “similar” in many ways.

Now, let me come to the topic of this blog post!

The world witnessed how a global city can be brought to its knees during this past week, when student agitators and the general public (more than a million people) protested against the rash introduction of an extradition bill, which would have allowed the Hong Kong government to extradite its citizens (and other residents) to Mainland China. I totally agree that the HK government could have been more prudent, more cautious, and more measured in the way it approached this extremely sensitive matter of extradition to China. It also did not do a proper Public Relations job, communicating the intricacies of the bill to the general public. There is only one reason for all of this fiasco: the blame points to Carrie Lam, the obstinate Chief Executive of the Hong Kong government (yes, they have a CEO!). She did a very bad job, and was forced to tender a weak apology to the people which further inflamed the public, because she only suspended the introduction of the bill (meaning it is not fully withdrawn from the Legislature) and did not show any inclination to resign.

As a third party not involved in any of this, one can only do some rational thinking (like what most of the media analysts were doing anyway). Hong Kong has extradition agreements with many countries, including the U.S. It is totally funny that Hong Kong is actually an integral part of China, but its people would not permit such an agreement with their own “motherland”. This signifies a total mistrust that the Hong Kong people have on the Mainland China government and its system of rendering judicial decisions. Hong Kongers of course, trust their well embedded British-style system of justice which has been in place for over a hundred years.

It looks absolutely strange to me, however. Hong Kong can never separate from the Mainland, and yet wishes to go against the Mainland government and judicial system (which are not going to change anyway). I don’t believe that the Mainland government wanted this headache when it had to deal with more pressing trade issues. The key issue is that Carrie Lam tried to push the legislation through when it was not even a key demand of the China federal government – she just wanted to stay in their good books forever, I guess.

So, the fault lies at the doorsteps of the Hong Kong government. There should be no doubt about it. The right thing to do is for Carrie Lam to withdraw the bill totally and persuade the attorney general (or whatever equivalent they have in Hong Kong) to release the people arrested. That will assuage the feelings of the people who felt victimised by the police force. Her resignation may not be required, but if she makes one more misstep she will be gone for sure.

Further, the student activists need to realise that China is always going to be their “mother”, irrespective of whatever else happens. The honeymoon period is long since over, though the official integration date lies far into the future in 2047, when the 50-year period after the British handover comes to pause. China can do anything even in the interim.

Why fight? Show your steely determination. But, call everyone to the table for a negotiation. Violence is never an option for both sides, especially so in such a hugely important financial centre. It will knock Hong Kong from its stable perch, and create big doubts in the minds of global corporations and financial institutions. Further, the preferential treatment that the U.S. and the European Union accord to Hong Kong on trade and finance related matters will come under scrutiny. That will also happen if Mainland China is seen as intruding into the freedoms of operation in Hong Kong, so it has to watch out as well. All these factors become very critical in the light of serious trade conflict that is in progress currently between China and the U.S.

So, in conclusion, Carrie Lam has to withdraw the legislation and curb her obstinacy from playing again and damaging Hong Kong; the students and the general public have to go back to their vocations and not continue to disturb peace on the island. China was in any case, not doing anything in this matter, it was not demanding anything to be done. The problem is entirely conceived by Carrie Lam.

I hope Hong Kong will be back on its feet by Monday and proceed to do trade and finance in the usual manner which the entire world has always appreciated. All the best to Hong Kong and its most energetic and capable citizens!

Cheers,

Vijay Srinivasan

22nd June 2019

The “Wellbeing” National Budget

How do you measure the success of a nation state?

From 1930’s, the single most popular measure has been the GDP, or the Gross Domestic Product, which purports to measure the economic output of a country. It is widely used as an economic growth parameter, and a continuously growing country is supposed to create wealth for its citizens. This has generally been true, and the economically prosperous countries also have some of the highest per capita incomes in the world.

But do economic measures such as GDP and GNP truly reflect the state of “wellbeing” of a country’s citizens? Do these measures accurately portray poverty levels, education standards, homelessness, mental health and healthcare status of citizens? Does every citizen benefit from the national economic growth of his or her country? Do citizens feel happy, or constantly complain about rising costs which affect their daily livelihood? Do citizens think that enough of the national budget is being allocated for education, healthcare and eliminating the scourge of poverty? What is the extent of inequality in a developed country – is it low enough to be ignored? Do citizens feel safe and secure?

The simple and rather simplistic answer is a NO.

There are very few nations which focus on the above non-economic measures to ensure that their citizens are well taken care of. The Nordic countries such as Finland come to mind. Education is completely free, and kids get free lunch at school. We cannot dismiss the Finnish model as a “nanny” state, which it is not. Norway, Sweden, Denmark all have higher status as “happiness” producing countries in the minds of their citizens. Unfortunately, there is no Asian country in the top 10 happiest countries – Japan, Singapore, Hong Kong do not make the cut. Bhutan is a happy country, being the first in the world to have a Gross National Happiness index, but did not make it to the global top 10 ranking in the 2018 report. According to the World Happiness Report published by the United Nations, New Zealand comes in at the 8th place, which is already great.

Now, New Zealand has become the first country in the world to actually publish a “wellbeing” National Budget. The focus is on a set of “wellbeing” priorities which will be adopted by all the ministries. According to the Prime Minister of New Zealand, the indomitable Jacinda Ardern, it is more critical to measure the health, satisfaction and safety of the citizens, than to just constantly fixate on GDP growth as a wellbeing measure.

I totally agree.

Though I cannot understand one thing: why do the Kiwis feel that their country is not a happy one? Why are they having one of the highest suicide rates in all of OECD (the league of economically developed Western countries)? Why is domestic violence so high in New Zealand, and yet the United Nations chose to place NZ in its 8th global rank on the world happiness report?

Nevertheless, this initiative to build the entire national budget around wellbeing of citizens is a fantastic one, a new concept, which will be closely watched by the rest of the developed world. NZ needs to ensure that it succeeds in implementation. Otherwise, it will be considered as a flash in the pan, with no measurable impact in creating a sense of well being and reducing levels of poverty and homelessness.

We have to wait and see the impact. In whichever manner we see it, the “wellbeing” budget is a novel concept focused on certain clear national people-centric priorities, which should, with effective implementation and followup, generate a significant sense of wellbeing in NZ citizens. My two cents is that PM Ardern has a new strategic thinking and should be commended for taking the risk to release such a budget to the scrutiny of the public and economic analysts.

All the best to her and her forward-thinking government.

Note: I visited NZ on a family vacation many years ago and came to the conclusion it is one of the best in the world, and my family has always wanted to return to NZ for a second vacation.

Cheers, and have a great weekend folks,

Vijay Srinivasan

15th June 2019

Globalization is Dead……….almost

For the past two decades or so, “globalization” was a sacrosanct terminology, not just in business but across the entire world. It was revered as the capitalistic solution to solving all the ills of the global economy. Several famous authors have written entire books on this concept of globalization, which have endeared millions of people.

Nothing wrong with the concept itself. In simple terms, “globalization” aims for a borderless world, with supply chains spread all over the world, providing jobs and revenues to countries which had been left out in the blitzkrieg of capitalism. Flow of capital and labour was supposed to follow the opportunities and cost arbitrage. China was the first country to figure out how all this works to their advantage, and over the past quarter century it has built up an incredible economy to rival that of the U.S. and the European Union, leveraging the supply side economics. Of course, it had all the advantages, such as a very low cost labour force, frictionless manufacturing and logistics capabilities, a non-bureaucratic way of governmental functioning, and a fierce commitment towards upgrading the lives of more than a billion people (which other countries lacked in various measures). Would you be surprised to learn that in 1993, the size of the Indian economy was about the same as that of China, but now China’s economy is some 5 times bigger than that of India? I am not, as I am from India, and understand full well that it takes a long while for an elephant to join the economic dance compared to a dragon which is swifter and more agile.

However, now globalization has had its full run, and its impact is waning with the onslaught of economic inequalities – wage disparities are so high that people are not able to sustain their lives while the corporate executives earn 100 times or more. Work as a denominator of productivity should lead to higher wages (not just in the U.S. of course), reduce wage disparities, and generate wealth eventually. Uniform wealth distribution is neither feasible nor possible, but people must have wage growth and more money in their hands to invest. Their nest eggs have to grow as well.

Apart from the inequality factor staring at their faces, Capitalists also have to contend with the new emergence of Socialism, as exemplified by Bernie Sanders, Elizabeth Warren, Alexandria Ocasio-Cortez, and others in the U.S. These are powerful voices emanating from the U.S. Capitol and cannot be ignored. The youngsters movement is gathering speed, and most young people are disgusted with corporate excesses and greed.

More and more countries are instituting protectionist trade policies, taking the cue from the U.S. At least the economically stronger countries are following this approach, as their domestic markets are big enough to sustain their economies and on the flip side, cannot be ignored by huge market making corporations. For instance, despite eCommerce Retail policies recently promulgated by the Indian government (to support local companies), Amazon and Walmart cannot ignore the size of the Indian consumer market. While protectionism will rear its head (in the same old fashioned ways from yesteryears), the MNCs have to figure out a suitable way to tackle policy issues, and still grow their business, as their growth can only come from outside their home countries (while their biggest share of profits come from their own home countries).

Where does all this lead us to?

Globalization is going to become rather selective – only if there is serious benefit to both parties, instead of 80% benefit to just one party. The manner in which the U.S. has dealt with China in the recent trade war shows that it is entirely possible to leverage sheer buying power to push the other party to come to the table and negotiate. Actions speak definitely louder than words, and the U.S. has demonstrated that by imposing tariffs which have started biting the suppliers’ top market. For a foreseeable future, the U.S., followed by the EU, will continue to be the world’s top two markets for almost anything that China can produce. India is emerging to be the third such top market, but it has someway to go.

Globalization should never have meant “loss of jobs” in the consuming market. While some jobs will be lost, entire industries disappearing was not postulated under the economic and market globalization theory. Free market philosophies failed to forecast that there will be serious impact to the consuming economies while most of the manufacturing jobs shift to the newly producing economies. The resulting trade imbalance was tolerated while economies were growing just about fine, but when the rust belt disappeared and key high tech manufacturing jobs started migrating elsewhere, the U.S. had to take action. Both George W Bush and Barack Obama did not do anything specific to counter this trend and negotiate with China to reduce the trade imbalance. Trump is the first President who ever dared China to respond, forced China to negotiate, and probably he will also be the first President to win a trade war with China.

Globalization and supply chain coordination will now take a “slightly” back seat, as other economic factors such as protectionism, short term labour issues, and socialism take precedence across the world. Leveraging trade prowess is nothing new but is now seen as a bulwark against one-sided globalization. Asian countries have benefited a lot over the past three decades or so, but now they have to redraft their economic, market and trade strategies to align with the emergence of these new forces in world trade, capital flows, labour movements, and the pressing need for political leaders to respond to their electorate on such issues. Economics 101 is now a critical aspect for running an election, and we will see that in the next U.S. Presidential Elections 2020.

Have a wonderful weekend folks,

Cheers,

Vijay Srinivasan

04 May 2019

The Healthcare Challenge

The biggest challenge any society faces today is how to keep its seniors productive and engaged, hoping to utilize their knowledge, expertise and experience while they still can work and contribute. This is especially true of economies such as Japan, South Korea, Hong Kong, Singapore and several other developed nations where rates of birth have been on the decline for decades.

The key factor in ensuring that the seniors continue to work (at least part time) and contribute to society, is achieving a competitively priced (I would argue low cost) healthcare. The proportion of budget allocation for healthcare is on the increase in developed countries, but it is still lower than the budget allocation for national security/defence. A big share of the healthcare allocation should go towards the older generation, as they have worked hard in building the society to where it is today, and it should be any government’s priority to fund their healthcare costs.

Good healthcare provision need not necessarily be very expensive, as often portrayed in the media. Private healthcare has become purely a for-profit business and is often associated with high cost since it purportedly offers higher quality as compared to public hospitals. Not so, in my opinion. I have seen good quality healthcare of comparable levels, in both private and public hospitals, at least in Singapore. The impression that people have is that private hospitals should be providing high quality due to better resources, doctors and equipment – this is not necessarily true. Most of us operate on referrals from friends. Even general practitioners are puzzled if you tell them you prefer a public hospital, as they know you could avail of private healthcare either due to corporate coverage or your own personal private insurance coverage. Why not spend more money, if you can knowing that it does not come from your pocket?

However, if the “greed” factor can be managed appropriately, there is a distinct possibility that private healthcare providers can provide decent quality at reasonable or fair prices, though higher than public healthcare costs. There are good examples of private healthcare providers who are viewed as reasonable in almost all developed countries.

In my opinion, the issue on the table is two-fold: reasonable healthcare coverage for all citizens (like what Singapore provides) via an insurance scheme tied to provident fund, and the willingness of private providers to fall in line with market demands, rather than stay isolated with an exalted brand image associated with very high costs.

For seniors, the challenge of healthcare is multi-faceted: apart from health ailments often associated with advancing age, they also have to contend with lack of a sense of well-being and potential isolation from society. Folks who have just turned 58 have a long possibility of continued contribution to society in many, many ways. How can they deliver on that promise, and how can a government encourage them to do so in a very proactive manner?

Providing healthcare on demand is the key. Seniors should get priority in accessing healthcare at a lower cost, which would strongly encourage them to continue serving the society which is taking care of their needs. People in Western societies continue to work well past 65, and age discrimination has not stopped them from operating in service industries wherein unemployement is rather low. Similarly, at the high end of the wage spectrum, there is a strong need for mature guidance from senior executives who have left active corporate jobs.

The other big issue with seniors is the emergence of previously unheard of diseases which affect their functionality, such as dementia and Parkinsons’ – these can be avoided or delayed by continued active work engagement which instils a strong sense of purpose. Helping younger generation and mentoring them are strong reasons why older folks would like to continue serving, albeit at lower time commitments.

So, in an overall sense, the healthcare challenge is looming large for seniors in all societies, and they can help themselves by continuing their engagement from where they left off, while trying to ensure that they keep well from a healthcare perspective. Keeping fit is not an easy task for any age group. It assumes big importance for the older generation due to various ailments which could be kept at bay by an appropriate fitness regimen and addressing healthcare issues in a timely manner. Governments should support the seniors aggressively, especially the ones just leaving their jobs for good. Both physical and mental health issues need to be addressed in this effort.

The return on investment from such efforts will add significantly to the GDP growth rate. Smaller countries will benefit more and faster due to efficiency of policy executions.

It is critical to bring the healthcare providers in line with society’s expectations, instead of letting them run riot – healthcare is not a “normal” or “regular” business. This also applies to pharmaceutical companies and other innumerable support providers in the healthcare industry. We have seen egregious examples of super greed by pharma companies in the U.S. which are rather very bad examples of how such companies try to extort unhealthy profits from consumers, insurance companies and hospitals.

In a nutshell, seniors can be productive for economies to grow, and they are asking for better quality healthcare at lower costs. Societies need to support them.

Have a great week ahead,

Cheers,

Vijay Srinivasan

17th March 2019

Why the rich shun taxes

Anyone who has followed the World Economic Forum debates would have surely chanced upon the illuminating one in which Dutch Historian Rutger Bregman heavily criticised the rich for not paying their share of taxes.

The traditional view of economics and politics has been that the rich would want to be taxed less, as they believe that they could directly contribute to nation-building in a more productive and efficient manner, instead of letting governments fritter away the increased taxes in an irresponsible and inefficient manner. After all, is it not true that business entrepreneurs are more adept in building functioning businesses and creating more jobs with the increased money that is available to them by way of reduced taxation?

Sounds good and appropriate?

May be not.

Our societies (in almost all countries) are characterised by income inequalities and non-inclusive growth benefitting few rather than the many. Inclusive growth remains a dream for many nations which aspire to equitable income distribution and growth benefits for all. Is it wise to just leave this most important objective of governments and societies to the whims and fancies of the richest people of the world? Of course, there have been good examples of the very rich people like Bill Gates, but there are also many, many bad or poor examples of rich folks who do not invest their less-taxed money on much-needed job creation or philanthropy.

Achieving a reasonable level of income equality is a very essential pre-requisite for national economic development. Such equality will then extend to education and healthcare for the citizens. As we know intuitively, any society will develop in a holistic manner if we address education, healthcare, infrastructure and systemic issues plaguing the society leading to crime and inner-city violence, etc., So, equitable income distribution is an absolute must for a society to develop faster without its attendant ills, and put it firmly on a path to economic and social growth.

But then, the rich do not want to pay more taxes. As the U.S. just demonstrated, the U.S. Congress successfully passed the tax reform bill which essentially reduced the tax rates for the wealthy (Republicans favour less taxes and less role for government in nation-building as core fundamental principles of their Party). When the wealthiest nation in the world is not playing ball to raise taxes on its most wealthy citizens, it means that the rest of the world is going to be disillusioned, thinking probably that they are on the wrong trajectory, based on what some academics state in their opinion pieces. Then the world would lose its battle against income inequality.

I quote here from the World Economic Forum 2019 event transcripts (I could not resist it!): “The ratio between executive pay and that of an average worker has grown from 30:1 in 1978 to 312:1 today. The top income tax rates in 1970 worldwide was 62%; that has been negotiated down to less than 38% in rich countries, and 28% in developing countries. In many countries, high tax rates on the rich have been abolished, while $170 billion every year is taken to tax havens.”

I am sure it is clear to my readers where the developed world is headed: less and less taxes for their wealthy (as their governments probably do not need the increased tax collections that are absolutely possible and needed for reducing their own countries’ income inequalities and providing for their homeless people sleeping on the streets). This is not a good thing even for the developed world.

What about developing countries? Many developing countries are unfortunately characterised by heavy levels of corruption, money laundering, stashing of illegal money, public bribing to win elections illegitimately, and weak systems of judiciary to counter the encroachment by the executive and the self-serving legislatures. This has become a never ending downward spiral of less and less money being devoted to national development and eliminating poverty. Of course, we can argue that pulling poor people above the line of poverty is a more urgent need in these countries than accomplishing income equality or reducing income inequality. But then, the poverty lines are set so low that it would take many generations before the poor folks could reach any semblance of equality in the society, while at the same time not having equal access to education and healthcare.

It is important for governments to realise that they cannot forsake the development of their countries by surrendering to blackmail by their rich people to take the business elsewhere, like what many tech companies did in the U.S. over the past couple of decades. Under pressure from President Trump’s administration, companies like Apple have finally agreed to bring their money back from low tax jurisdictions to the U.S. and invest in job creation in the U.S. [sorry folks, I have to give credit where it is absolutely due, and in this particular case, President Trump did the right thing to exert pressure that was much needed to make tech companies behave – after all, they should show some patriotism, not just driven by economic greed caused by low taxes elsewhere].

It is not at all surprising that the rich do not wish to pay more taxes, and are, in fact, working to persuade their governments to reduce not just their income taxes but even their inheritance taxes. They mostly think they are smarter (and most of them are) than the rest of us. They think that they are capable of strongly influencing their politicians and governments. They think that they can invest the extra money left in their hands in ways wiser than what their own governments can do.

Well, well, now you get the overall picture – where the society is and where the rich at the top are. Don’t get me wrong – it is not illegal to be rich, but it is unconscionable not to be willing to pay fair share of taxes or avoid and evade taxes altogether. What happened to the people in the middle and bottom of the pyramid who helped the rich man’s enterprise to get to where it is today? Without them, can anything of value be produced in any industry or business? Did they get their due share of incomes? Did the rich even bother to find out if these folks got their fair access to education for their children, healthcare for their families, and so on and so forth. Did the governments bother at all? As long as democratically elected governments are subservient to purely economic interests, the situation on the ground is unlikely to change, and income inequalities will continue to persist.

Good to think about during a Sunday………..

Have a great week ahead, folks.

Cheers,

Vijay Srinivasan

10th March 2019

Far removed from Reality

The World Economic Forum (WEF) concluded yesterday at the Swiss Alpine resort of Davos.

This time around it was a low-key affair since several powerful countries and leaders did not attend. For instance, President Trump and Prime Minister May did not come due to serious problems that they are currently faced with in the U.S. and the U.K. respectively.

However, many billionaires and world leaders did attend, as participation at the Davos WEF has become an annual pilgrimage for movers and shakers from around the world. The WEF conducts forums in other major countries, but none beats the depth and comprehensiveness of the Davos forum.

There were many key issues affecting humanity that were discussed at this year’s event, such as the alarming negative impact of Climate Change. This is nothing unusual. The point is that most attendees come from elite or political or business backgrounds and are, in general, rich. It would be interesting to measure and report the average net worth of all the invited participants at Davos forum. That should prove that this crowd is far removed from the daily mundane reality of an average (not even a poor) citizen’s life, anywhere in the world.

How can a rather small collection of rich and powerful folks make a critical analysis of problems facing this planet and humanity? How can they “feel” the problems, pains, challenges and issues that a common man or woman needs to tackle in his or her life? Are these people really addressing the “real” issues and coming up with practical solutions to world’s rather intractable problems? Or, are they just networking socially and having fun, either at corporate or government expense? Let us not forget that these elite folks already know each other (mostly and generally) from previous interactions. One obvious objective is to learn from each other – what are the current views of the “elite” and “learned” folks from around the world, have lunches / dinners / cocktails and learn more of each others’ perspectives, etc., There are, of course, multiple panel discussions from which our elite participants will learn even more.

But, what is the concrete action plan to better the life of the average citizen coming out of this most expensive jamboree at an exclusive Swiss resort? Is there something coming out of this event that will affect the life of the common man, is there something that he can even understand?

Such events, are in general, a waste of money, which could be deployed in social projects and alleviate poverty. But that is not the concern of the rich folks who schmooze over caviar and wine. This is the obvious disconnect which exists between such powerful gatherings and life’s realities.

I studied the agenda and the events of WEF held last week. There were many useful and relevant topics covered in the agenda, no doubt. There was significant coverage of environment, climate change and the impact of technology – Artificial Intelligence, Machine Learning, etc., – these are all very relevant, I should say.

The key question, however, is how will WEF deliberations change the world for the better from a socio-economic point of view. What is the success rate of WEF influencing socio-economic policies of governments around the world which choose to attend the WEF event and actively engage other attendees. My theory is that economics at a theoretical level is of no practical use, unless the main users of economic principles (viz., governments) apply the same in consultation with WEF (not the IMF or the World Bank both of which apply tortuous conditions on countries seeking their financial support). How can some of the useful deliberations at the WEF be successfully applied in large countries such as India, China or Indonesia? What are the resources available to the governments which want to reform their economies? What technologies can be leveraged? What are the practical methods that we can adopt for sustaining the deteriorating environment? And so on, and so forth.

May be these things are already being executed. However, in my research on WEF’s practical applications, I could not find clear cut evidence. I could not put my finger on the specific outcomes which are being followed up by WEF around the world.

If my audience can clarify, I will be happy to post an update to this post. If WEF disagrees with what I have stated, all that is required is a response to this blog post, and I will post the same as a correction to what I have written.

In a nutshell, I would like WEF to understand two things –

1. The utility value of the annual WEF meeting is not grasped by the proletariat, and I have seen no evidence that WEF is making an attempt to communicate as such;

and,

2. The obvious disconnect between the abject reality of peoples’ lives and the economic deliberations at WEF conducted at the apex levels of governments and corporates surely exists, whether acknowledged by WEF or not.

Socialism is emerging even in that most Capitalistic country in the world – I mean the U.S. and its potential ramifications over the next few years have not been understood by the key economic players – whether in governments or corporates. This is also something that WEF needs to address. How about inviting Bernie Sanders and Alexandria Ocasio-Cortez to the WEF 2020 as key note speakers?

Cheers, have a good weekend folks,

Vijay Srinivasan

26th January 2018

The Make-Believe Yet Real

I have been wanting to write on this topic for quite a while.

I struggled with the title a bit, as I thought it should reflect what I really feel about the specific matter about which I am going to write in this post. How do I communicate about something in a succinct yet penetrating manner? I realized that I have to go a long way in mastering the English language! It has been tough though I might sound simplistic!!

This post is about the City-State of Singapore.

It is sometimes too hard to believe that this bustling city of 5.6M people produces a GDP of USD 330B, translating to USD 57K GDP per capita, placing it as the third richest country in the world. It is managed like a global corporation with efficient allocation of capital and resources, with long-term planning firmly in place, assuring its citizens and residents of long-term economic and political stability. It is hard to grow at more than 3% GDP growth rate for such a highly developed country with physical limitations on geographical size and population (which is not growing).

My point in writing this post is to compare how Singapore manages peace and prosperity in a cogent and planned manner, as compared to cities like Paris or New York or London. I cannot compare it with large countries as Singapore is just a city. When I look at the extensive TV coverage on the yellow-vest protest in Paris, or the multiple people protests in New York that went on last week, it is apparent that the respective governments are not doing a fine job of addressing the issues or grievances of the people who are protesting. Probably they couldn’t care less. There is law and order problem in almost every major city around the world – as we know, there are downtowns and also the seedier parts of town with criminal gangs operating in many cities. There is violence perpetrated every day – you just need to look at the gun-related crimes in the U.S. or even in just one major city in the U.S. to understand how far violence has embedded itself into the psyche of the American society.

I am not trying to say that people cannot protest to convey their views. This is possible in Singapore in a government regulated place which is designated for that purpose. Disrupting the city’s business and economy should not be the way. In cities in India, people protests are often infested with political parties’ radical elements who have their own agenda and also criminals who get a free ride to perpetrate violence in the guise of being part of such “people protests”. There is no way to control such situations. The images of public transport buses burning, public property damaged, private cars destroyed, civil services disrupted, and so on and so forth, have poured in even from such a civilized and cultured country such as France. The massive outpouring of people against the government is a big indication of disconnect between those who govern and those who are governed.

Violent protests causing damage and death have no place in civil society. The best way to bring down an elected government is to precipitate a massive defeat in the next elections – not to dethrone it via the undemocratic method of public violence. Such a thing has happened in many countries – such as Ukraine in 2014 when a popularly elected government was overthrown with the support of Western governments and people protests. [Note: I am not a supporter of Russia – I am mentioning this fact just as an example].

Of course, there are governments which suppress people protests with a heavy hand, causing further damage. They incarcerate people who did nothing but participate in protests for a long time without due process. There are many examples of such happenings around the world.

Governments which do not listen to their electorate will eventually face defeat in the subsequent elections. So, people have to be patient to exercise their franchise in the next elections. While peaceful protests are fine, how will any government ensure peace when they are dealing with some 10,000 or more people at one go in one place in a city? Law enforcement is likely to make errors in judgement.

Coming back to Singapore, the peace and prosperity remain the key tenets of the government and of the people. There is absolute sync between the government and its citizens on certain fundamental principles and frameworks. Citizens may not always agree with the government, and there are plenty of examples of such situations. I would mention the issues of overcrowding of subway system and immigration – there are many more. The government, however, heard the issues, analyzed the causes and addressed the same. It is absolutely critical that countries have “listening” governments.

The government – citizen compact has to be heavily communicated and understood. I agree that bigger countries such as the U.S., China, India and the U.K. have larger issues and more people problems to be tackled. Singapore may not have those kinds of problems and issues. The key difference is the measured approach, cautious thinking, consultations with key affected parties, and communication. As we can witness the current ongoing stalemate in the U.S. government shutdown, hard positions between key branches of government are untenable and unsustainable, because the affected people will eventually hit back. Maturity is needed, and if the elected President and House Speaker cannot even sit down and sort out the issues bedeviling the country, then the hope for a positive resolution drops considerably in the minds of the citizens. In the meanwhile, running of the government suffers, and 800,000 government servants are going without paycheck. Not at all acceptable in a civil society and in a democracy.

I can also cite the example of the U.K. where a “no-deal” Brexit is staring at peoples’ faces with its attendant uncertainty and impending economic chaos. If it were Singapore’s problem, it would have been tackled differently, in a more mature way. There is not much rationale in countering that Singapore would not have such an issue as Brexit. If an “Asian Union” were formed in the same manner as the European Union, then Singapore would be a part of it, and such a situation as Brexit is entirely feasible. A referendum is not a solution, in my opinion. Citizens are good in electing popular governments, but collective policy making cannot be sub-contracted to the whims and fancies of sections of society who could sway the vote which could affect the entire country and its people. This is a debatable argument, and I am not strong in propounding this – I have to work on strengthening the logic and rationale of such an argument. An elected government has been given the task of running the country in the best possible manner, and it has to execute its job keeping the best interests of its citizens, yet be ready to compromise where needed. There is nothing like “my way, or highway”. If that were the case, Malaysia and Singapore would not have enjoyed peaceful co-existence over the past five decades.

Well, I can keep going on. In a nutshell, the large countries of the world need enlightened governments with a broad perspective on public issues and long-term thinking. I know it is easier said than done, as large countries have fractious and finicky electorates and fragmented political parties. But then, we want the best amongst ourselves to govern us, right? It means that successful people in their own fields of endeavour have to be persuaded to participate in the political process and be part of the government execution even if they do not win elections.

Singapore continues to be one of the best managed countries in the world, even without the economic statistics to support it. If that is not the case, how do we explain the fact that foreigners who come here do not really wish to leave a city which has almost zero crime, decent economic opportunities based on merit, good public transport, almost all government services available on a digital mode to its citizens, a good healthcare system (although expensive), etc., though I have to state that the real estate is extremely expensive. It is a long track record which is hard to beat amongst the developed countries of the world.

Yes, it appears to be “make-believe” when you live here, yet it is absolutely real.

Have a great week ahead folks,

Cheers,

Vijay Srinivasan

20th January 2019